Financial Literacy
How to Set a Realistic Budget Using Last Year's Financials
By Matthew Slomowicz·April 20, 2026·4 min read
A budget built from a guess is a wish list. A budget built from last year's actual numbers is a plan — and it only takes clean books to build.
Start with actuals, not assumptions
Pull last year's monthly P&L and use actual revenue and expense patterns as your baseline, rather than starting from a blank spreadsheet and guessing.
Adjust for known changes
Layer in anything you already know is changing — a new hire, a price increase, a lease renewal — on top of that real baseline, rather than trying to forecast from scratch.
Reviewing actual results against this budget every month is what turns it into a working tool instead of a document that gets filed away and forgotten.
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